CBP, NCBFAA, and BIS Testify on Bill to Enhance AES, Allow Licensing of Filers, Etc.

Testifying at this hearing were representatives from U.S. Customs and Border Protection (CBP), the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA), the Bureau of Industry and Security (BIS), etc.

The following are highlights of the witnesses' written hearing statements, particularly as they pertain to H.R. 5828, the Securing Exports Through Coordination and Technology Act.

(H.R. 5828 was introduced on April 17, 2008 and would require the federal government to enhance the Automated Export System (AES), allow for the licensing of AES filers, etc. See ITT's Online Archives or 04/24/08 news, 08042420, for BP summary.)

CBP's Initial Observations

CBP states that DHS and other concerned agencies are currently reviewing H.R. 5828 and will provide detailed observations to the Committee at a later date. However, the written statement does express concerns with the various provisions of H.R. 5828, including:

AES filer licenses counterproductive. Effective export controls will be achieved from full interoperability between all participating government agencies within the current export licensing regime that governs controlled commodities, rather than imposing a new licensing regime that would require every exporter to obtain a license to export.

Imposing further licensing requirements on individuals or entities for the sole purpose of allowing them to use AES would place an unneeded burden on the exporting community. The flow of commerce could be slowed and CBP resources strained if it were required to validate whether an exporter was licensed or not prior to clearing export cargo.

Blocking of AES filings insufficient. What occurs with the information after an exporter attempts to file a SED to a prohibited country or entity? The simple act of blocking the filing is insufficient, as it does not alert authorities that a prohibited entity or an entity in a prohibited country is trying to illegally procure sensitive U.S. goods.

Information associated with the proposed blocks and warnings should be provided to DHS and the Department of Commerce concurrently.

Records of warnings should be saved. In establishing violations of export control laws, the government must prove that the defendant was aware of the licensing requirement and chose to violate it. In cases where exporters are warned that their export may require a license, a record of this warning should be kept.

Measures should be taken to inform exporters that the AES filers are set-up to provide additional protections, but are not in fact a "catchall" to prevent illegal exportation and it must be stressed that the exporter must still utilize due-diligence in determining whether or not their export requires a license.

NCBFAA Supports H.R. 5828

NCBFAA supports H.R. 5828, stating that it can be a compliance tool for an exporter making an inadvertent or honest mistake, provide assurance to the government that filers of AES data have the requisite skills, knowledge, and professionalism by requiring filers to be licensed, etc.

NCBFAA notes that it would develop a curriculum to educate its members in order to qualify for an AES filing license and then to meet Census' continuing education requirements. For those who are not NCBFAA members, Census has the authority to conduct similar such training for those seeking a license.

BIS Welcomes Broad Goals of Bill, Expresses Reservations

BIS notes that while it welcomes the broad goals of H.R. 5828 to further enhance the reliability and effectiveness of information in AES, there are limitations to the types of validations that can be programmed into AES, given the complexities of the Export Administration Regulations and law enforcement needs.

May 20, 2008 hearing testimonies available at http://foreignaffairs.house.gov/testimony.asp?subnav=close.